OTIS
Otis Worldwide Corporation
$75.53
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.9% above fair value
You pay
$75.53
Bear
$42.00
Fair
$52.50
Bull
$63.00
Bear
$42.00
-44.4%
$3.50 × 12x P/E
Fair
$52.50
-30.5%
$3.50 × 15x P/E
Bull
$63.00
-16.6%
$3.50 × 18x P/E
Adjust Assumptions
15.0x
3.5$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
21.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$85.40
Divergence from AlphaVal
39%
Summary
Applying a 15x P/E to adjusted EPS of $3.50, the base-case value is $52.50 per share.
Warnings
Wall Street's average price target is $85.40 (from 15 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples